Bankruptcy And Divorce: Credit Cards
Any Orlando bankruptcy lawyer, or any bankruptcy lawyer for that matter, who has represented clients with financial problems for a decent amount of time will tell you that filing bankruptcy and filing for divorce go hand in hand. This is a sad truth, but a truth nonetheless.
Bankruptcy and divorce are so intertwined, and the issue comes up so often with my clients, that I’ve decided to devote several articles to deal exclusively with this subject. In this article, I’ll discuss how filing bankruptcy and filing for divorce effects the credit card debt that each spouse may have.
The most important thing to remember when discussing divorce and credit card debt, is that the only ones party to your divorce are you and your spouse. That is, a third party, like your and your spouse’s creditors, are NOT part of your divorce proceedings and consequently, are not obligated to abide by your marital settlement agreement.
While you rely on a marital settlement agreement when you split up, your and your spouse’s creditors do not care about this agreement. When you separate, you and your spouse decide how to divide your debts and commemorate this with your martial settlement agreement. You and your spouse are bound by this agreement, but your creditors are not. Your creditors put their trust in the credit card agreement, car loan, mortgage, etc., that was signed when they issued credit. How you decided to divide your liabilities in the martial settlement agreement does not concern them, and the law supports this.
When it comes down to it, if you signed the creditor agreement with the creditor in question, you will continue to be liable for the debt, no matter who the marital settlement agreement “assigns” the debt to.
Should one the the ex-spouses discharge their debts by filing bankruptcy, the other spouse, who has not filed for bankruptcy will continue to be legally bound by the credit agreements and therefore liable for the debts, no matter what the marital settlement agreement said. To get rid of their debt liability, the non-filing spouse must either try to work something out with the creditors, or filing bankruptcy themselves is also an option.
I intend to address some of the other legal issues that my clients face when discussing Divorce and Bankruptcy in the coming weeks and months on my blog.
For more information about filing bankruptcy, please check out this FREE E-COURSE from your Orlando bankruptcy lawyer. This article, Bankruptcy And Divorce: Credit Cards has free reprint rights.